Friday, 16 March 2012

49%

So much misinformation, so let’s look at just one piece of nonsense; the hysteria raised at the news NHS hospitals will be allowed to generate up to 49% of their income from private patients. This has been presented as anything from “handing over 49% of the NHS to the private sector” to the only slightly less-nonsensical “49% of NHS resources being used for the private sector”. Such statements fail to note the private sector will have to pay. Also we can be confident in the assertion (since otherwise there would be nothing in it for the hospital) that any provision of services to the private sector would be at a charge greater than their cost - in other words, a profit - an important detail given that simple logic shows this will enable the treatment of more (not less) NHS patients.

In this illustration, whilst accepting that not all operations cost the same and therefore some beds cost more than others, we will for the sake of simplicity use a hospital bed as the financial unit of measurement. And since we accept there must be profit, in this example we will say it is in the order of “1 bed” profit for every “100 beds” of service to the private sector. This allows us to make the following three statements:

An NHS hospital funded by the tax-payer to the equivalent of “510 beds”, and with no income from private patients, has a capacity of 510 beds for use by NHS patients.

An NHS hospital providing “486 beds” to the private sector will make (rounding down) “4 beds” profit for NHS patients.

An NHS hospital funded by the tax-payer to the equivalent of “510 beds”, and with a private income of “490 beds” of which “4 beds” is profit, has a capacity of 514 beds for use by NHS patients.

Of course the service provided by a hospital is more than the number of beds, and in the example above we arbitrarily choose the level of profit, but what we can also see is that the 49% limit is entirely artificial and no doubt politically motivated. The fact remains that an NHS hospital having any level of profit generating private income will, for the same level of tax-payer funding as a hospital funded by the tax-payer alone, be able to provide more services to NHS patients. Indeed this statement is so patently obvious, I wonder at all the fuss.